Frederick building applications continue momentum through March

The year seems to be starting off well for the building industry, according to a report by a Frederick County housing professional.

In his latest report, John Lynn Shanton, president of Strategic Marketing Group, said 250 residential permits were applied for January through March for Frederick County and the City of Frederick.

“The number of residential permit applications appears to be continuing. This is good for my growth projections,” Shanton said. His company tracks construction growth in the region.

“This is exciting and shows potential for growth in the coming year,” Shanton said in an earlier report. “Based on selected interviews with larger builder-developers, this could be interesting and a challenge for new development.”

For March, there were 23 new permits in the county, 22 for single family homes and one for a mobile home. In the city, there were eight single-family home permit applications.

It could be a sign for another strong year for builders. In 2012, there were 989 permits applied for in the county and city, a jump from 495 in 2011. That is still far from the 1,200 permit applications in 2002. Applications in following years, according to Shanton’s reports, ranged from 500 to 700 a year until the drop in 2011.

According to builders, economic uncertainty played a part in the 2011 slump, but confidence has picked up last year and is continuing into 2013.

“I’m hearing from many of the local builders, my firm included, that it has been a strong start to the spring,” wrote Thomas Hyde, president of the Frederick County Building Industry Association, in an email. Hyde is vice president-land for Miller and Smith, a Virginia-based builder- developer.

“Sales are up and they are outpacing production. In particular, the single family market seems to have tightened up significantly, many of the incentives have been removed or reduced and prices are beginning to creep up.”

Challenges remain

In a talk to the Frederick County Building Industry Association earlier this year, C. Melissa Jonas, director of the Mid-Atlantic Region for MetroStudy, forecast “a gentle trend upward over the next two quarters” for home construction.

Jonas warned, however, of rising costs for building materials and the uncertain situation with the federal government that must be considered. MetroStudy does intense research, including on-site review, of growth in the U.S.

Mark Lancaster, owner of Lancaster Craftsmen Builders in Middletown, said the continuing cost of materials is a major factor. Lancaster is one of the most aggressive “green” builders in the area who recycles or reuses much of the material that was previously discarded. Still, he must face the rising cost of the initial materials from drywall and wood to plumbing and electrical products.

Confidence among U.S. homebuilders fell this month because of concerns that increased demand for new homes is exceeding supplies of ready-to-build land, building materials and workers.

In the short term, those constraints could slow sales. But builders’ outlook for sales over the next six months has reached its strongest point in more than six years.

The National Association of Home Builders/Wells Fargo builder sentiment index fell to 44 from 46 in February. It was the second decline since January, which was preceded by eight straight monthly gains. Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.

Single-family homes still popular

In January, Ausherman Development applied for 70 condominium/apartments in Whittier, according to Shanton’s report.

But for the county, and in February’s and March’s reports, single-family homes are still the highest number in applications.

In the city, there were 11 single family, versus four townhomes in February; eight single family in March, no other applications.

In the county, 33 single family in January, 20 in February and 22 in March. Townhomes ranked second in the county, 25 in January, 5 in February, none in March.